The economy has certainly presented quite a few challenges for consumers in recent years, as prices for everyday items increased substantially and interest rates rose higher than they had been in more than a decade.
Thirty-eight percent of regional residents said they are spending more money now compared to last year, while only 28% are saving more, according to a Money Trends survey from WSFS Bank. Among those who said their spending increased, the rise in costs and inflation was the top driver (69%).
Here are tips to help strengthen your financial situation.
Inflation is Cooling, But Challenges Remain
While inflation has cooled and the Federal Reserve recently cut interest rates for the first time since 2020, economic pressures have remained for consumers, emphasizing the importance of staying disciplined in your budgeting, spending and saving.
The WSFS survey found that more than half are spending more on essentials like groceries (65%), utilities (55%), and transportation (53%) than last year. Many consumers are still feeling the pricing pressures for the essentials in the current economy, resulting in 33% saying they’re cutting non-essential spending.
Among just a few opportunities to look for savings on expenses: shop at discount retailers, purchase store brand items, and buy in bulk, particularly for shelf-stable items when they are on sale. Planning your expenses out in advance can be a good way to stay on budget before hitting the store.
It is also a good idea to revisit your regular expenses such as your phone, cable and internet bills and negotiate potential savings with your providers. With the rise of so many streaming and subscription services, weigh your options of what you use the most. Crunching the numbers can help decide which services to get rid of or if making the switch from cable to streaming-only might be right for you.
Opportunities Still Exist to Grow Savings
The WSFS survey found that 46% are saving less overall compared to last year, slightly down from 2023 (50%), while 28% are saving more this year, up from 2023 (21%).
Those surveyed who said they are saving more are focused on strengthening their financial foundations, with the leading reason they’re saving more being to ensure future financial stability (42%), followed by having specific savings goals (41%) and being more prepared for financial emergencies or unexpected expenses (40%).
Goal-setting is a vital part of your financial journey. Make your goals specific, measurable and on a certain timeline to keep your budget and plans on track.
Revisit your budget monthly to ensure your goals remain on target and address any deficits before they begin to grow. A great way to keep track of your expenses in real-time is to use your online and mobile banking, and break expenses into categories to help identify where you may be over-spending.
While changing your spending and saving habits can be difficult, it is important to remember that small adjustments add up over time. Ordering food with just a few clicks on our phones can be super convenient, but those expenses and fees add up quickly. Opting to make your morning coffee at home or cutting back on how frequently you use delivery apps are just two ways to save more.
While the economic headwinds of the past few years have made it more expensive to borrow and difficult to save, some of those pressures are beginning to ease and an opportunity still exists for savers to take advantage of still-elevated interest rates.
For those with extra room in their budgets, certificates of deposit (CDs) and high-yield money market accounts tend to offer higher rates than a standard savings account. With a CD, your money will be locked in for the duration of the term, while money markets can offer a bit more flexible access to your funds.
If you need assistance developing your savings goals and a roadmap to achieve them, consider scheduling an appointment with your local banker who can help craft a plan and answer any questions you may have.
Shari Kruzinski is Executive Vice President and Chief Consumer Banking Officer at WSFS Bank. Her career spans more than 30 years in the banking industry at WSFS. In her current position, Kruzinski leads the Consumer Banking division including the Retail network, Small Business banking, WSFS Mortgage, and the Contact Center.
